Mixed-use development is—in a broad sense—any urban, suburban or village development, or even a single building, that blends a combination of residential, commercial, cultural, institutional, or industrial uses, where those functions are physically and functionally integrated, and that provides pedestrian connections.[1][2] The term ("a mixed-use development") may also be used more specifically to refer to a mixed-use real estate development project—a building, complex of buildings, or district of a town or city that is developed for mixed-use by a private developer, (quasi-) governmental agency, or a combination thereof.

Traditionally, human settlements have developed in mixed-use patterns. However, with industrialisation as well as the invention of the skyscraper, governmental zoning regulations were introduced to separate different functions, such as manufacturing, from residential areas. In the United States, the heyday of separate-use zoning in the U.S. was after World War II, but since the 1990s, mixed-use zoning has once again become desirable as the benefits are recognized. These benefits include:[3]

greater housing variety and density

reduced distances between housing, workplaces, retail businesses, and other destinations

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Throughout most of human history, the majority of human settlements developed as mixed-use environments. Walking was the primary way that people and goods were moved about, sometimes assisted by animals such as horses or cattle. Most people dwelt in buildings that were places of work as well as domestic life, and made things or sold things from their own homes. Most buildings were not divided into discrete functions on a room by room basis, and most neighborhoods contained a diversity of uses, even if some districts developed a predominance of certain uses, such as metalworkers, or textiles or footwear due to the socio-economic benefits of propinquity. People lived at very high densities because the amount of space required for daily living and movement between different activities was determined by walkability and the scale of the human body. This was particularly true in cities, and the ground floor of buildings was often devoted to some sort of commercial or productive use, with living space upstairs.

This historical mixed-used pattern of development declined during industrialisation in favor of large-scale separation of manufacturing and residences in single-function buildings. This period saw massive migrations of people from rural areas to cities drawn by work in factories and the associated businesses and bureaucracies that grew up around them. These influxes of new workers needed to be accommodated and many new urban districts arose at this time with domestic housing being their primary function. Thus began a separating out of land uses that previously had occurred in the same spaces. Furthermore, many factories produced substantial pollution of various kinds. Distance was required to minimize adverse impacts from noise, dirt, noxious fumes and dangerous substances. Even so, at this time, most industrialized cities were of a size that allowed people to walk between the different areas of the city.

These factors were important in the push for Euclidean or single-use zoning premised on the compartmentalization of land uses into like functions and their spatial separation. In Europe, advocates of the Garden City Movement were attempting to think through these issues and propose improved ways to plan cities based on zoning areas of land so that conflicts between land uses would be minimized. Modernist architects such as Le Corbusier advocated radical rethinking of the way cities were designed based on similar ideas, proposing plans for Paris such as the Plan Voisin, Ville Contemporaine and Ville Radieuse that involved demolishing the entire center of the city and replacing it with towers in a park-like setting, with industry carefully sited away from other uses.

In the United States, another impetus for Euclidean zoning was the birth of the skyscraper. Fear of buildings blocking out the sun led many to call for zoning regulations, particularly in New York City. Zoning regulations, first put into place in the 1916 Zoning Resolution, not only called for limits on building heights, but eventually called for separations of uses. This was largely meant to keep people from living next to polluted industrial areas. This separation, however, was extended to commercial uses as well, setting the stage for the suburban style of life that is common in America today. This type of zoning was widely adopted by municipal zoning codes.

With the advent of mass transit systems, but especially the private automobile and cheap oil, the ability to create dispersed, low-density cities where people could live very long distances from their workplaces, shopping centres and entertainment districts began in earnest. However, it has been the post-second World War dominance of the automobile and the decline in all other modes of urban transportation that has seen the extremes of these trends come to pass.

In the 1920s, the U.S. National Zoning Enabling Act of 1923 and a series of National Subdivision and Planning acts in English-speaking countries first set forth standards and practices of single-use zoning to be adopted by every municipality, which soon became the standard for all post-World War II development. These laws enforced and codified standards for modern suburban design as it is known today, which have been exported to many other countries through planning professionals and transportation engineers. The resulting bills progressively included restrictions on alleyways, minimum road widths, restrictions on cross streets for major arteries, buffer zones between separate areas, and eliminating mixed-use in all new developments, resulting in a moratorium on traditional urban development which remains in place in most areas that are not specifically zoned as "mixed use" or "general urban development", a common term for grandfathered urban areas. In addition, some existing urban areas commonly cited as mixed-use have been rezoned in such a way that, if demolished, they could not be rebuilt as such; for example, post-flood redevelopment areas in the 18th-century city of New Orleans.

Throughout the late 20th century, it began to become apparent to many urban planners and other professionals that mixed-use development had many benefits and should be promoted again. As American, British, Canadian and Australian cities deindustrialized, the need to separate residences from hazardous factories became less important. Completely separate zoning created isolated "islands" of each type of development. In most cases, the automobile had become a requirement for transportation between vast fields of residentially zoned housing and the separate commercial and office strips, creating issues of Automobile dependency. In 1961, Jane Jacobs' influential The Death and Life of Great American Cities argued that a mixture of uses is vital and necessary for a healthy urban area.

Zoning laws have been revised accordingly and increasingly attempt to address these problems by using mixed-use zoning. A mixed-use district will often serve as the "downtown" area of a local community, ideally associated with public transit nodes in accordance with principles of transit-oriented development and new urbanism. Mixed-use guidelines often result in residential buildings with streetfront commercial space. Retailers have the assurance that they will always have customers living right above and around them, while residents have the benefit of being able to walk a short distance to buy groceries and household items or see a movie.

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Mixed use development is often seen as too risky by many developers and lending institutions because economic success requires that the many different uses all remain in business. Most development throughout the mid to late 20th century in the United States was single-use, so many development and finance professionals see this as the safer and more acceptable means to provide construction and earn a profit. Christopher B. Leinberger notes that there are 19 standard real-estate product types that can obtain easy financing through real estate investment trusts. Each type, such as the office park and the strip mall, is designed for low-density, single-use zoning. Another issue is that short-term discounted cash flow has become the standard way to measure the success of income-generating development, resulting in "disposable" suburban designs that make money in the short run but are not as successful in the medium to long term as walkable, mixed-use environments.[5]

Mixed-use commercial space is often seen as being best suited for retail and small offices. This precludes its widespread adoption by large corporations and government facilities.

Construction costs for mixed-use development currently exceed those for similarly sized, single-use buildings; challenges include fire separations, sound attenuation, ventilation, and egress.

Additional costs arise from meeting the design needs. In some designs, the large, high-ceilinged, columnless lower floor for commercial uses may not be entirely compatible with the smaller scale of the walled residential space above.

Single-use developments are commonplace at high, medium, and low urban density, but low-density mixed-use developments are rare. Where density is high and transport is by automobile, parking space requirements (often mandated by the same subdivision act requirements that restrict mixed-use) are likely to exceed those of low density residential development, and the large number of parking spaces may be difficult to finance. Note that this is equally true for any other higher-density development remote from public transport; however, compared to residential zones, this may be a drawback due to the required higher initial investment that only amortizes over the medium and long term. On the other hand, in denser areas, owning an automobile might be considered a luxury rather than a necessity, especially where there is good public transport. Therefore, others argue that mixed-use neighborhoods need less parking space and are more efficient (see Donald C. Shoup, The High Cost of Free Parking). Manhattan is an example of an unusually high density leading to relaxation of standards in this matter.